ACC205 Week 5 Discussion 1 and 2 MUST BE ORIGINAL

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Discussion 1

Ratios

Ratios provide the users of financial statements with a great deal of information about the entity. Do ratios tell the whole story? How could liquidity ratios be used by investors to determine whether or not to invest in a company?


For a written transcript, please click here.

Guided Response:

Let at least two of your peers know how debt service ratios can be used by a lender in determining whether or not to lend money to a company.

Week 5 – Discussion 2

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Your initial discussion thread is due on Day 3 (Thursday) and you have until Day 7 (Monday) to respond to your classmates. Your grade will reflect both the quality of your initial post and the depth of your responses. Refer to the Discussion Forum Grading Rubric under the Settings icon above for guidance on how your discussion will be evaluated.

Profit Margin

Year Ending December 2012

Year Ending December 2011

Year Ending December 2010
Revenues 40,000

35,000

33,000
Operating Expenses
Salaries 15,000 10,000 9,000
Maintenance and Repairs 6,000 9,000 10,000
Rental Expense 2,500

2,500

 2,500
Depreciation 2,000 2,000 2,000

Fuel

 4,000 3,500 2,500
Total Operating Expenses 29,500 27,000 26,000

Operating Income

 10,500 8,000 7,000
Sales and Administrative Expenses 6,000 4,000

3,000
Interest Expense 2,500 2,000 1,000
Net Income 2,000 2,000 3,000

Above is a comparative income statement for Cecil, Inc. for the years 2010, 2011, and 2012. Calculate the net-profit margin for each of these years. Comment on the profit margin trend.


For a written transcript, please click here.

Guided Response:
Let at least two of your peers know what you changes you would recommend to improve the net margin of the company.